J&J Must Separate Top Compliance Officer and GC

, The Litigation Daily


This article originally appeared in Corporate Counsel, an affiliate of the Litigation Daily.

As part of the new Corporate Integrity Agreement [PDF] the federal government entered into with Johnson & Johnson Monday, the pharma giant is required to maintain a chief compliance officer independent of the general counsel’s office.

The 101-page agreement was part of the $2.2 billion settlement announced Monday with the U.S. Department of Justice to resolve civil and criminal allegations related to the off-label marketing of the antipsychotic drug Risperdal for children, the elderly and the mentally disabled. J&J didn’t immediately return phone calls Wednesday.

Janssen Pharmaceuticals, a J&J subsidiary, was scheduled to plead guilty Thursday morning to the criminal misdemeanor charge in U.S. District Court for the Eastern District of Pennsylvania. That charge involved off-label marketing for the elderly, especially Alzheimer’s disease patients, despite serious possible side effects.

But J&J was not as agreeable on the civil allegations. In a rare stance, the company released a statement Monday accepting “accountability” for the actions in the criminal plea, but it “expressly denies the government’s civil allegations” contained in three False Claim Act suits in federal courts. It agreed to settle those suits anyway.

“Today we reached closure on complex legal matters spanning almost a decade,” said general counsel Michael Ullmann in the statement. “This resolution allows us to move forward.”

But in a swipe at the disputed civil allegations, Ullman added, “We remain committed to working with the U.S. Food and Drug Administration and others to ensure greater clarity around the guidance for pharmaceutical industry practices and standards.”

Ullman has been general counsel for J&J since 2012. He joined the company in 1989 as a mergers and acquisitions lawyer and worked his way up through various legal department positions, including general counsel of the Worldwide Medical Devices and Diagnostics Group.

As the company moves forward, it will be under the guidance of the five-year agreement on how to run its compliance program.

“The J&J CCO shall not be or be subordinate to the chief legal officer or chief financial officer,” the agreements states.

John Crisan is listed as J&J’s chief compliance officer after working as general counsel for the J&J Consumer Group. Under the agreement, he reports to the chief executive officer as well as to the regulatory, compliance and government affairs committee of the board of directors.

In addition, Janssen and other subsidiaries must maintain their own compliance officer through their North American Leadership Team. And it must hire an independent compliance expert to create a compliance program review plan and to report on it and make recommendations.

The agreement states that any change in either compliance officer must be reported to federal authorities.

The agreement demands various quarterly reviews and reports, plus certification by multiple executives. It also requires a written code of conduct, new compensation incentives for salespeople, and training for “covered persons” and board members.

And it outlines in minute detail how to conduct and present research studies and authored articles, among many other things.

J&J is no stranger to such deals. In April 2010, the same subsidiary, then known as Ortho-McNeil-Janssen Pharmaceuticals Inc., settled federal charges over illegal promotion of an epilepsy drug. It entered a Corporate Integrity Agreement [PDF] that was still in effect and is superseded by the newer one.

And in April 2011, J&J settled a Foreign Corrupt Practices Act criminal charge by entering into a deferred prosecution agreement with the Justice Department. Notably in that action, the government said J&J’s compliance program was “effective,” despite the bribery violation.

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